Saskatchewan’s minimum wage should be adjusted according to the annual increase in the province’s consumer price index (CPI), said a report from the Saskatchewan Minimum Wage Board.
“Adjusting the minimum wage to the Saskatchewan CPI will ensure a constant level of purchasing power for minimum wage earners. It will also enhance accountability as to the nature of the increases in the minimum wage,” said the Report on Indexation. “To ensure the provincial minimum wage is competitive with other jurisdictions across Canada, coupled with continuing improvements to the provincial tax regime, the board believes that now is a suitable time to begin indexing the minimum wage.”
The current minimum wage is $9.25 per hour in Saskatchewan but the board recommended it be adjusted annually each September and should rise by $0.19 in September 2011. The province has to remain competitive with neighbouring provinces and it is important to maintain a minimum wage that fosters a climate of business investment as well as attracting new entrants into Saskatchewan’s labour market, said the board.
“A fixed date for adjusting the minimum wage will provide employers and employees the opportunity and ability to plan for future increases in costs or pay,” it said.
“It is mainly out of the interest to protect the purchasing power of minimum wage earners, to provide better planning opportunities for businesses and employees through more predictable adjustments, and to enhance accountability in the increases to the minimum wage that the Minimum Wage Board is putting forth the recommendations,” said the report.
Expected adjustments to the minimum wage each September would be announced in April, giving employers ample planning time, said the board. A full review of the wage would be triggered if it falls below 41 per cent of Saskatchewan’s average hourly wage of if the Saskatchewan CPI was to increase more than three per cent in a given calendar year.
“Adjustments should not be automatic. Full reviews will ensure there is accountability and that raises to the minimum wage will not occur without due diligence,” said the board.
However, the minimum wage should not decrease should the Saskatchewan CPI decrease in a given year, recommended the board.
“Minimum wage earners’ incomes should be predictable and reliable. Therefore, in years of deflation, current wage levels should be maintained.”
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